What is the sequence of steps in preparing the master budget?
A)Output from the financial budget is used to prepare the operating budget.
B)Output from the operating budget is used to prepare the financial budget.
C)Output from the financial budget is used to prepare the income statement.
D)Output from the financial budget is used to prepare the operating expense budget.

Question

Quizplus · Accepted Answer

The sequence of steps in preparing the master budget typically begins with the operating budget, which outlines the expected sales, production costs, and operating expenses. This budget is then used to prepare the financial budget, which includes the expected cash flows, capital expenditures, and other financial aspects of the business. Therefore, the output from the operating budget is used to prepare the financial budget.

What Is the Sequence of Steps in Preparing the Master